Archives for Turkey

Turkey last week strengthened its energy ties with Iraq by renewing a contract to import Iraqi oil to the Turkish Mediterranean Sea port of Ceyhan, where Azerbaijani oil also arrives via the Baku-Tbilisi-Ceyhan (BTC) pipeline. Earlier this year, it was announced that Iraq will export between 5 billion and 10 billion cubic meters per year of natural gas to Turkey for inclusion in the Nabucco pipeline carrying the fuel to Europe.

Statements by Azerbaijani and Turkish diplomats indicate that the two sides have reached an agreement in principle concerning the price that Turkey will pay for gas from the offshore Shah Deniz deposit for its own domestic consumption. With these signals, the two countries are on the road to settling issues related to conditions for Shah Deniz gas to transit Turkey to Europe through the Nabucco pipeline.

Various diplomats appear to be questioning the supposed competition between the Nabucco and the South Stream natural gas pipelines. In fact, Russia and Turkey are collaborating to block the full implementation of the EU’s Southern Corridor energy strategy so as to assert a duopoly over natural gas supplies to Europe.

In recent days, energy diplomats on both the Azerbaijani and Turkish sides have revealed that an agreement in principle over the price that Turkey will pay for Shah Deniz gas from Azerbaijan has been reached. However, there are several ongoing sets of simultaneous negotiations over Shah Deniz, also taking place in the context of larger implicit bargaining games over other the Caspian Sea basin deposits of natural gas and indeed the geo-economics of their supply to Europe over the next several decades. These subtleties must be unpacked in order to understand the wide-ranging significance of even seemingly small agreements.

Viktor Yanukovych came first in the presidential elections in Ukraine, but Yuliya Tymoshenko has instructed lawyers to bring to the courts evidence of voting irregularities to put Yanukovych’s margin of victory under question. Even if the latter is able to muster a negative majority to oust her from office and form his own parliamentary majority, he may be forced to call new parliamentary elections. Nevertheless, he has already moved on the energy front through floating new proposals, if not yet able to offer them formally for legislative consideration. The elections in Ukraine change the odds also for other projects in the east-west energy corridor from Central Asia and the Caucasus to Europe.

Ukraine’s run-off election between Prime Minister Yulia Tymoshenko and rival Viktor Yanukovych, to be held on Sunday, may decide the future of a pipeline that could be used to deliver Caspian Sea oil to Europe, bypassing both Russia and Turkey.

The opening of the first segment of the Turkmenistan-China gas pipeline last month is only one in a series of recent events in Caspian Sea basin energy developments. It signifies Turkmenistan’s first real moves to break its dependence upon Gazprom and the Russian state for international sales of its energy resources. These developments are to the detriment of Europe, which remains dependent upon Russia and Turkey as transit countries and has been unable to push forward the implementation of its Nabucco pipeline project.

With the entry of Iraq into the mix of potential suppliers of natural gas for the Nabucco pipeline to Europe and the proliferation of alternative supply lines beyond the Russian-sponsored rival South Stream pipeline, the “classical” variant of the Nabucco pipeline is undergoing significant modification, just as it moves closer to final realization.

Azerbaijan’s efforts to diversify gas export routes and reduce its reliance on Turkey as a transit country for moving the fuel on to Europe are increasing as its negotiations with Ankara over supplies continue to face difficulties. As talks with drag on with Turkey, Azerbaijan has recently added Iran and Bulgaria to its customer base.

For over 15 years the U.S. has worked to promote cooperation over energy issues among the newly independent states in the Caspian Sea region. A proclaimed goal of U.S. energy policy in the region since the early 1990s has been to make certain that countries in the region do not have to depend upon any single export route that could easily be squeezed off.

Peace, Conflict and Cooperation in Greater Eurasian Energy Development Strategy and Security Policy.

About: Robert M. Cutler

Dr. Robert M. Cutler is Senior Research Fellow, Institute of European, Russian & Eurasian Studies, Carleton University, Ottawa. Based in both Montreal and Brussels, he was educated at the Massachusetts Institute of Technology (B.Sc.), Geneva Graduate Institute of International Studies (Gallatin Fellow) and The University of Michigan (Ph.D.), and has held research and teaching appointments at major universities in Canada, France, Russia, Switzerland and the United States. After a dozen years exclusively in universities (where he taught subjects in international relations, comparative politics and political philosophy and all levels of instruction), he expanded into policy analysis and consulting, foremost as an Energy Security and Geo-economics Specialist, now spending up to half his time in Brussels. Besides producing the whole portfolio of scholarly, policy, and public-intellectual information products, he continues to serve on academic-journal and policy-review editorial boards in addition to executive committees of professional scholarly and policy research organizations.